1.

Cite three examples of recent decisions that you made in which you, at least implicitly, weighed
marginal costs and marginal benefits.
a. Choosing a thesis meeting over an OJT workday.
b. Choosing Angkas(160 pesos) as a means of transport over jeep/fx (12/20 pesos).
c. Choosing to play DOTA 2 for 5hrs over writing retreat letters.
2. State (a) positive economic statement of your choice, and then (b) a normative economic
statement relating to your first statement.
a. The price of palay plunges to P7/kilo.
b. Government should halt the implementation of rice tariffication law.
3. Why isn’t money considered a capital resource in economics? Why is entrepreneurial ability
considered a category of economic resources, distinct from labor?
a. Money is not productive. The capital is a factor of production thus it should produce
goods and services. A good example of this is factories, tools, equipment,
transportation, etc.
b. Entrepreneurial ability organizes goods and services but does not directly produces
them. Entrepreneurs are innovators as well as risk-takers.
4. Briefly explain the use of graphs as a way to present economic relationships. What is an inverse
relationship? How does it graph? What is a direct relationship? How does it graph? Graph and
explain the relationships you would expect to find between (a) the number of inches of rainfall
per month and the sale of umbrellas. (b) the amount of tuition and the level of enrollment at a
university, and (c) the popularity of an entertainer and the price of her concert tickets.

Using of graphs in presenting data are much easier to be visualized and understood
economic relationships compared to mathematical formula or numbers.

Inverse relationship can be described as x increases, y decreases. Two sets of data move
in opposite directions. Direct relationship can be described as x increases, y also increases. two
sets of data move in the same direction.

Fig 1. Inverse Fig 2. Direct

Relationship Relationship
a. The number of people needing umbrellas will be higher due to higher amount of rainfall.

b. The higher the tuition fee, the lesser the people will enroll at that university.

c. As the entertainer grow popular, the more people will want to watch him/her perform.